Vermont’s
system may potentially reduce lawsuits. First, no patient needs to
sue for medical care from an injury because everyone gets health
care. Without need for medical riders, insurance rates for medical
malpractice, automobile, and business go down. Workers Compensation
premiums go down as well. Second, a compensation board awards payment
for medical injuries. Negligence plays no role.

Healthy
Lifestyles.

Americans
may lead the world in obesity, but we are among the lowest in smoking
and alcohol consumption. When we correct life expectancy for obesity,
tobacco, alcohol, homicides, and traffic accidents,
our world ranking does not improve.
Bad habits do not account for our first place health care costs.

Adult
smokers and overeaters cannot quit their addictions. However, we can
dramatically reduce the number of teenagers who start. States with
higher
tobacco taxes have lower rates
of new smokers. There’s nothing like taxes to stifle an economic
activity.

Health
Policy. 2004
Jun; 68(3):321-32. “Public policy and smoking cessation among
young adults in the United States”. Tauras JA.
http://www.ncbi.nlm.nih.gov/pubmed/15113643

Self-abusive
life styles. Addictive life-style habits such as overeating, tobacco,
alcohol, and drugs of abuse cost our health care system many billions
of dollars.

The
amount the US
spends on all alcohol-related disease
is $96 billion; on obesity, $144 billion; on tobacco, $168 billion.
We are unlikely to reduce any of these expenses to zero. In contrast,
we save over twice as much as the cost of any of them by adopting a
single payer system.

Administrative
costs saved by using single payer. Remember the added cost of
providing comprehensive health care to everyone in the US (i.e., no
uninsured or underinsured) requires an additional $250 billion.
Estimates vary considerably. I use $350 billion as it has the best
peer-reviewed data support.

How
much would a single payer system save in recovered administrative
costs?

The
AMA's most recent look at the health insurance market -- "Competition
in health insurance: A comprehensive study of U.S. markets,"
released Feb. 23 and based on 2009 data -- finds that 99% of 313
metropolitan areas tracked would be considered to have "highly
concentrated" insurance markets under guidelines used by the
U.S. Dept. of Justice and the Federal Trade Commission. In its 2009
version of the study, the AMA found that 94% of metropolitan areas
were ranked "highly concentrated."

Krugman
P. “Passing the buck.” New York Times, April 22, 2005.
Competition for insurance companies means avoiding the most expensive
enrollees and denying the most care.

http://associationpublications.com/flipbooks/oma/summer-11/pubData/source/OMA_Summer2011.pdf.
A Conversation with David Lawrence, MD, MPH, By Jim Kronenberg,
“History of Medicine Project. Medicine in Oregon,” Summer 2011,
page 18. Portland native David Lawrence, well known for his role as
Medical Director and CEO of Kaiser Northwest, discussion with Dr.
Ian MacMillan of Kaiser, and Dr. George Waldmann, chairman of the
History of Medicine in Oregon Project, OMEF. Health Insurance
Companies: “(There is) no call whatsoever for a for-profit
insurance industry in the United States. It makes no sense. The
health insurance system in the United States adds no value to
medical care delivery… It's a fragmenting, destructive system, and
we're the only country in the world that has it…. I've never
understood why there needs to be as many options as there are in
health insurance, or as much competition…. The competition needs
to be on the delivery system side, not on the financing side.”

History
of Single payer health care.

It
was created by an American industrialist, Henry J. Kaiser. His health
care plans pre-date World War II and thrive to this very day. He had
three very capitalist assumptions. (1) If he kept his construction
workers healthy, they would be more productive, (2) If he paid
providers directly rather than through private insurance companies he
would save money, and (3) if he kept their families healthy as well,
he could attract and keep productive workers. All assumptions proved
true. He made millions and never looked back. Brief and fascinating
histories can be found at:

American
private health insurance companies generate higher administrative
costs than any single payer health program in the US or any universal
health care plan in the industrialized world. For the 40%
administrative costs of private health insurance, please see my
calculation at:
http://www.samuelmetz.com/reference/121206-40percent.htm

Mark
Pearson, Head Health Division, OECD, Written statement to Senate
Special Committee on Aging, 30 September 2009. Disparities in health
expenditures across OECD countries: Why does the United States spend
so much more than other countries? This reference documents higher
administrative costs in the US versus other OECD countries.

“Achieving
a High-Performance Health Care System with Universal Access: What the
United States Can Learn from Other Countries.” American
College of Physicians Annals of Internal Medicine January
1, 2008 vol.
148 no.
1 55-75.
Quotes
CMS data: administrative
overhead for private U.S. health insurance was 14.3% in 2005,
administrative costs of Medicare Part A were less than 1.6%, were
under 2.1% for Medicare Part B, and combined state and federal
administrative costs for Medicaid were less than 1% of disbursements.

CMS,
“Annual Reports of the Boards of Trustees,” 2009 and 2010,
www.cms.gov; CMS, “National Health Expenditures by Type of Service
and Source of Funds,” calendar years 2008 to 1960. Administrative
costs for Medicare were 1.4 percent in 2008, excluding overhead in
private Medicare Advantage and Part D pharmaceutical plans, Including
the overhead from private plans in Medicare's overhead raises it to
5.3 percent”.

Concentrated
health insurance markets lead to higher prices. “The exercise of
market power by firms in concentrated markets generally leads to
higher prices and reduced output—high premiums and limited access
to health insurance—combined with high profits…Policies focused
only on health insurance sector reform may yield some results, but
are unlikely to solve larger cost growth and limited access
problems.”

“The
practice of medical underwriting, which consists of offering better
prices and conditions to the healthy, rearranges the cost burden of
health care but has little or no effect on overall costs. Although an
individual insurer earns higher profits by attracting a healthier
risk pool via medical underwriting, total costs to society are not
reduced. Because underwriting consumes real resources, a system with
extensive medical underwriting may have higher administrative costs,
which provide little social benefit.” Page 52

Factors
that contribute to the discrepancy between health outcomes and health
expenditures in the United States: inequitable access to medical
services and subsidized private insurance policies; and
inefficiencies in public health insurance.

US
ranked last among developed nations in providing universal access to
health care

US
ranked last among developed nations in “avoidable mortality” from
treatable disease. 2006: “The US Health System is not the best on
quality of care, nor is it a leader in health information technology…
despite spending more per capita than other nations, the United
States lags behind lower-spending nations on several metrics,
including life expectancy and infant mortality. … compared with
other industrialized countries, the United States also had higher
mortality rates for conditions that are considered amenable to
medical care.”

“Few
Canadians use US instead of waiting... Relative to the large volume
of these procedures provided to Canadians within adjacent provinces,
the numbers are almost indetectable. … only 0.11 percent (20 of
18,000 respondents) said that they had gone there for the purpose of
obtaining any type of health care, whether or not covered by the
public plans …”

http://www.cdc.gov/nchs/ppt/nchs2010/44_MacDorman.pdf
Behind International Rankings of “Infant Mortality: How the United
States Compares with Europe.” Marian MacDorman and T.J. Mathews
“International Health Rankings: A Look Behind the Numbers.
National Conference on Health Statistics.” August 16-18, 2010, and
http://www.cdc.gov/nchs/data/databriefs/db23.pdf
“Behind International Rankings of Infant Mortality: How the
United States Compares with Europe.” Marian MacDorman and T.J.
Mathews. National Center for Health Statistics Data Brief, No. 23,
November 2009. (US Department of Health and Human Services, Centers
for Disease Control and Prevention)

“The
main cause of the US’ high infant mortality rate when compared to
Europe is the very high percentage of preterm births in the US, the
period when infant mortality is greatest… In 2005, the latest year
that the international ranking is available for, the United States
ranked 30th in the world in infant mortality, behind most European
countries, Canada, Australia, New Zealand, Hong Kong, Singapore,
Japan, and Israel (5)…The
United States international ranking in infant mortality fell from
12th in the world in 1960, to 23rd in 1990 to 29th in 2004 and 30th
in 2005 (5).
After decades of decline, the United States infant mortality rate did
not decline significantly from 2000 to 2005 (6)…The
U.S. infant mortality rate was still higher than for most European
countries when births at less than 22 weeks of gestation were
excluded. [Hungary, Poland, Slovakia]… The United States compares
favorably with European countries in infant mortality rates for
preterm, but not for term infants… The percentage of births that
were born preterm was much higher in the United States than in
Europe.

As
a share of GDP, health care spending in the US also exceeds spending
by other industrialized nations by at least 5 percentage. Despite
this relatively high level of spending, the United States does not
appear to achieve substantially better health benchmarks compared to
other developed countries

US
residents have fewer physician visits than any other of the 19 OECD
citizens, with greater disparity in access to physicians based on
income. “private funding is often regressive and negatively impacts
on the uptake of needed services, in particular for vulnerable people
at risk of social exclusion.”

Guyatt
GH, et al. Open Medicine, Vol
1, No 1 (2007),
A
systematic review of studies comparing health outcomes in Canada and
the United States.

Available
studies suggest that health outcomes may be superior in patients
cared for in Canada versus the United States, but differences are not
consistent…Canadian outcomes appear superior in head and neck
cancer, and possibly for low-income patients with a variety of
cancers; American women with breast cancer appear to have better
survival rates than Canadian women…evidence strongly suggests that
Canadian end-stage renal patients truly have higher survival than
those in the US.

Taiwan’s
single-payer NHI system enabled Taiwan to manage health spending
inflation and that the resulting savings largely offset the
incremental cost of covering the previously uninsured. Under the NHI,
the Taiwanese have more equal access to health care, greater
financial risk protection, and equity in health care financing.

“In
past patient surveys among the five English-speaking countries, the
United States has stood out for having relatively short waiting times
for specialized care… Our findings also indicate that insurance and
delivery systems affect patients’ experiences beyond basic access
and waiting times. Symptoms of inadequate insurance coverage and more
fragmented care in the United States emerged throughout the survey…
the United States often ranks last or tied for last for safety,
efficiency, and access.”

“In
2007 amenable mortality was highest in the United States, with rates
almost twice those seen in France (Exhibit 1). [relative
to France, Germany, UK]….[the US] also
experienced smaller improvements in rates between 1999 and 2007 than
the other three countries…Our analyses confirm our hypothesis that
the relative impact of health care in the United States varies by age
group as a result of age-dependent differences in access to health
care. We show that the lagging progress of the United States compared
to other countries, as measured by amenable mortality, is largely
driven by elevated amenable mortality among those younger than age
sixty-five.. Factors associated with receiving appropriate care in
the United States included being treated within the Department of
Veterans Affairs and having adequate insurance.”

Annals
of the New York Academy of Science. “Health
Insurance and Access to Health Care in the United States.”
Catherine
Hoffman, Julia
Paradise. Article first published online: 25 JUL 2008,
DOI: 10.1196/annals.1425.007.

“Few people choose
to go without health insurance; the primary reason for being
uninsured is that coverage is not affordable. The health services
research reviewed here shows a strong association between health
insurance coverage and access to primary and preventive care, the
treatment of acute and traumatic conditions, and the medical
management of chronic illness. Moreover, the research connects being
uninsured with adverse health outcomes, including declines in health
and function, preventable health problems, severe disease at the time
of diagnosis, and premature mortality.”

Longman,
P. “Best Care Anywhere; Why VA Health Care is better than Yours.”
Polipoint Press, 2007. The VA cares for America’s sickest patients
with the best results at the lowest cost with the highest patient
satisfaction of any health care system in the country.

“Cost
Control in a Parallel Universe: Medicare Spending in the United
States and Canada.” David
U. Himmelstein, MD; Steffie Woolhandler, MD, MPH, Arch
Intern Med. 2012;():1-2.
doi:10.1001/2013.jamainternmed.272. Published online October 2012

“US
Medicare spending per elderly enrollee rose from $1215 in 1980 to
$9446 in 2009 (an inflation-adjusted 198.7% increase). The comparable
increase for Canada was 73.0% (from $2141 to $9292). For the
1971-2009 period, US costs rose 374.1% vs 126.3% for Canada, and
estimated foregone savings were $2.9024 trillion…Life expectancy at
age 65 years is longer and has grown faster in Canada than in the
United States since 1980 (and 1971), offering reassurance that cost
control has not compromised quality. A meta-analysis suggests that
clinical outcomes are, if anything, better for Canadians than for
insured Americans.”

Every
industrialized country including those in Europe provides better care
to more people for less money than we do. All use the three
principles of universal enrollment with no discrimination against the
sick, few hurdles to primary care, and publicly accountable
transparent not-for-profit financing. Some are single payer. None use
our unique American business model of private health insurance.

Reid,
TR. The Healing of America, Penguin Press, New York, 2009 The best
introduction to how American health care contrasts with that of
other nations.

Universal
programs in other countries contain costs better than us without
restricting access to essential health care. “One notable result
that should interest Americans is that Taiwan’s universal insurance
single-payer system greatly reduced transaction costs and also
offered the information and tools to manage health care costs. Alex
Preker, a leading health economist at the World Bank, came to a
similar conclusion from his research of OECD countries. He concluded
that universal health care led to cost containment, not cost
explosion.”

Mark
Pearson, Head Health Division, OECD, Written statement to Senate
Special Committee on Aging, 30 September 2009. Disparities in health
expenditures across OECD countries: “Why does the United States
spend so much more than other countries?”

“…in
the United States, … uninsured and underinsured populations
experience rationing through financial inability to access care,
medical debt, and use of inappropriate services such as hospital
emergency departments.”

“Achieving
a High-Performance Health Care System with Universal Access: What the
United States Can Learn from Other Countries.” American
College of Physicians Annals of Internal Medicine January
1, 2008 vol.
148 no.
1 55-75.

“Analysis
by the ACP of health care in 12 other industrialized countries
illustrates various approaches to assuring universal access to
high-quality health care. Each system has provided comparable or
better health care at less cost than in the United States.”

“ Single-payer
systems generally have the advantage of being more equitable, with
lower administrative costs than systems using private health
insurance, lower per capita health care expenditures, high levels of
consumer and patient satisfaction, and high performance on measures
of quality and access.”

There
is no requirement that American single payer systems be government
run.

Letter
by Mark H. Ayers, chairman of the National Coordinating Committee for
Multiemployer Plans, to the U.S. House of Representatives Committee
on Ways and Means for the June 24, 2009 Health Reform in the 21st
Century: Proposals to Reform the Health System.

“…26
million American workers and families who depend on joint
labor-management, multiemployer health and welfare trust funds for
their medical and other health benefits… over 90% of whom employ
fewer than 20 workers and more than half who employ fewer than 10…”

“More
than 59 percent of American workers are covered by self-funded plans,
according to a 2010 report by the Oakland, Calif.-based Henry J.
Kaiser Family Foundation and the Health Research and Educational
Trust. The percentage of covered workers in self-funded plans
increases as the number of employees in a firm goes up… and 93
percent of covered workers in firms with 5,000 or more workers were
in self-funded plans, according to the Kaiser/HRET report.”

David
Goldstein, President & CEO, Intelligent Health (732)735.2974,
private communication, November 11, 2012. “… between 73-100
million American workers and their dependants are covered by a
self-insured health plan—that is, one in which the employer
assumes the financial risk for providing health care benefits to its
employees, rather than buying insurance.”

Are
“vouchers” an option for financing health care?

For
the record, “vouchers” are a variation on “premium support.”
While premium supports limit government risk and spending, economists
are not optimistic about consequences to patients. There are no
examples of vouchers reducing costs or improving health. This does
not mean health care vouchers couldn’t work, only that they should
be regarded as experimental.

“Under
premium support, insurers have an incentive to avoid enrolling those
individuals who are higher than average in terms of their potential
for using covered services, that is, the older and sicker
beneficiaries. Insurers will be more likely to engage in risk
selection behaviors… most premium support proposals, including the
Ryan 2012 budget plan, would require participating plans to accept
any beneficiary who applied, regardless of their health status…
Opponents question, however, whether such rules and risk mitigation
mechanisms can fully offset the economic incentives for plans to
engage in such risk selection behaviors.”

Do
financial obstacles to primary care keep people healthier at lower
cost?

The
RAND organization conducted two studies, decades apart, giving two
health insurance options to employees of large companies: A
low-priced policy with high deductibles, or high-priced policy with
low deductibles. The results in both studies were similar: the group
motivated to avoid medical care spent modestly less and enjoyed
equivalent health outcomes compared to the other group. Note: the
second study followed patients only for one year.

Conclusion?
When insured employees have money to pay either high deductibles or
high policy prices, those with high deductibles spent less with no
apparent medical harm. This seems to validate the premise that “skin
in the game” produces financial and health benefits. Here are the
RAND studies.

These
studies of well-compensated employees should not be applied to people
who can afford neither high deductibles nor high policy prices. In
this latter population (the old, the poor, the unemployed, the
underemployed, the uninsured, those on fixed incomes), results are
different. The number of people in this category is increasing.

Collins
SR, et al. “Squeezed: Why rising exposure to health care costs
threatens the health and financial well being of American families.”
Commonwealth Fund, September, 2006. 58% of individuals shopping for
insurance could not afford what was available

Studies
of patients lacking money to pay either high premiums or high
deductibles unanimously conclude cost-sharing increases long term
costs and reduces health.

Higher
co-pays decrease primary care and outpatient visits, increase
hospitalizations and overall health care costs in Medicare patients.
This is amplified among the poor, uneducated, and those with chronic
diseases (hypertension, diabetes, and coronary artery disease).

Do
people make wise insurance choices?

People
make poor choices when confronted by insurance options. This may
reflect poor medical understanding, illiteracy, focus on immediate
rather than long term costs, inability to guess which future diseases
or conditions they might suffer, or stupidity,.

“…people
in the lower third of the cognitive ability and numeracy
distributions were at least eleven percentage points less likely than
those in the upper third to enroll in a supplemental Medicare
insurance plan.” Complexity of Medicaid prevents many from making
the appropriate selection.

"Our
results then do not support the proposition that consumers can make
and benefit from good choices in private health insurance markets,
and direct health care resources to their best use." Plan
Selection in Medicare Part D: “…fewer than 10 percent of
individuals enroll in what for them would be the most cost-effective
plans.This
is apparently because seniors pay more attention to their
out-of-pocket premiums than to the overall benefits… indicative of
how consumers behave in real-world decision situations with a
complex, ambiguous structure and high stakes.”

“Using
2009 Part D data, we found that only 5.2 percent of
beneficiaries chose the cheapest plan. Nationwide, beneficiaries on
average spent $368 more annually than they would have spent had they
purchased the cheapest plan available in their region, given their
medication needs.”

Who
should assume the financial risk of large unexpected medical
expenses? Placing the financial risks of bad outcomes onto providers
fails to reduce costs or improve outcome.

Summarized
by Stephen Kemble, MD: “…all 34 pilot care coordination projects
funded by CMS either failed to save any Medicare spending at all, or
if they did save on health care spending, they cost more in
administrative expenses than they saved, for a net increase in
total cost for all of them. Three of four payment reform
demonstration projects that relied on pay-for-quality incentives
failed to save money, and the only successful one negotiated a
discounted, bundled fee for coronary bypass surgeries and did not use
pay-for-performance incentives.”

“Despite
offering substantial financial incentives, the MassHealth P4P program
did not improve quality in the first years of implementation.”

The
Veterans Affairs system cares for America’s sickest patients with
the best outcomes at the lowest cost with the highest satisfaction in
the country. These physicians have no financial stake in patient
outcome.

VA
and Tricare compare favorably to commercial insurance in quality and
cost.

“Over
time the scope of benefits provided to veterans and military
beneficiaries has grown, reaching a point today where these packages
are significantly better than most private employer health plans.
With these programs providing care that is of equal quality and lower
cost, potential beneficiaries are increasingly switching out of
private plans.”

Among
persons aged 65 years or older, the VA health-care system significantly outperformed private-sector MA [Medicare Advantage]
plans and delivered care that was less variable by site, geographic
region, and socioeconomic status.